AMENDED IN ASSEMBLY JUNE 20, 2016

AMENDED IN ASSEMBLY MAY 23, 2016

AMENDED IN SENATE JANUARY 4, 2016

AMENDED IN SENATE APRIL 15, 2015

SENATE BILL No. 215

Introduced by Senators Leno and Hueso

February 12, 2015

An act to amend Sections 309.6, 1701.1, 1701.2, 1701.3, 1701.4, and1701.5 of, and to add Sections 1701.6, 1701.7, and 1701.8 1701.6 and1701.7 to, the Public Utilities Code, relating to the Public UtilitiesCommission.

legislative counsel’s digest

SB 215, as amended, Leno. Public Utilities Commission.(1)  The California Constitution establishes the Public Utilities

Commission, with jurisdiction over all public utilities. The CaliforniaConstitution grants the commission certain general powers over allpublic utilities, subject to control by the Legislature, and authorizes theLegislature, unlimited by the other provisions of the CaliforniaConstitution, to confer additional authority and jurisdiction upon thecommission that is cognate and germane to the regulation of publicutilities. Existing law requires the commission, upon initiating a hearing,to assign one or more commissioners to oversee the case and anadministrative law judge, where appropriate. Existing law requires theassigned commissioner to prepare and issue, by order or ruling, ascoping memo that describes the issues to be considered and theapplicable timetable for resolution. Existing law requires the commissionto adopt procedures on the disqualification of administrative law judges

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due to bias or prejudice similar to those of other state agencies andsuperior courts.

This bill would require the commission to additionally adoptprocedures on the disqualification of commissioners due to bias orprejudice similar to those of other state agencies and superior courts.For ratesetting or adjudicatory proceedings, the bill would require acommissioner or an administrative law judge to be disqualified if thereis an appearance of for bias or prejudice based on specified criteria.The bill would prohibit commission procedures from authorizing acommissioner or administrative law judge from ruling on a motionmade by a party to a proceeding to disqualify the commissioner oradministrative law judge due to bias or prejudice.

(2)  The Public Utilities Act requires the commission to determinewhether a proceeding requires a hearing and, if so, to determine whetherthe matter requires a quasi-legislative, an adjudication, or a ratesettinghearing. For these purposes, quasi-legislative cases are cases thatestablish policy rulemakings and investigations, which may establishrules affecting an entire industry, adjudication cases are enforcementcases and complaints, except those challenging the reasonableness ofany rates or charges, and ratesetting cases are cases in which rates areestablished for a specific company, including general rate cases,performance-based ratemaking, and other ratesetting mechanisms. Theact regulates communications in hearings before the commission anddefines “ex parte communication” to mean any oral or writtencommunication between a decisionmaker and a person with an interestin a matter before the commission concerning substantive, but notprocedural, issues that does not occur in a public hearing, workshop,or other public proceeding, or on the official record of the proceedingon the matter. Existing law defines “person with an interest” to mean,among other things, a person with a financial interest in a matter beforethe commission, or an agent or employee of the person with a financialinterest, or a person receiving consideration for representing the personwith a financial interest. Existing law requires the commission, byregulation, to adopt and publish a definition of the terms“decisionmaker” and “persons” for those purposes, along with anyrequirements for written reporting of ex parte communications andappropriate sanctions for noncompliance with any rule proscribing exparte communications. The act provides that ex parte communicationsare prohibited in adjudication cases and are prohibited in ratesettingcases, with certain exceptions. The act requires that ex parte

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communications be permitted in quasi-legislative cases, without anyrestrictions. The commission’s Rules of Practice and Procedure definea “decisionmaker” as any commissioner, the Chief Administrative LawJudge, any Assistant Chief Administrative Law Judge, the assignedadministrative law judge, or the Law and Motion Administrative LawJudge. The Rules of Practice and Procedure provide that communicationswith a commissioner’s personal advisors are subject to all of therestrictions on, and reporting requirements applicable to, ex partecommunications, except that oral communications with an advisor inratesetting proceedings are permitted without the specified restrictions.

This bill would require that the commission determine whether everyproceeding, not just those requiring a hearing, is a quasi-legislative,adjudication, or ratesetting proceeding. The bill would delete theprovision that an ex parte communication concerns a substantive, butnot a procedural matter, and instead would provide that an ex partecommunication concerns any matter that the commission has notspecified in its Rules of Practice and Procedure as being a proceduralmatter and that does not occur in a public hearing, workshop, or otherpublic proceeding, or on the official record of the proceeding on thematter. The bill would prohibit the commission from considering as aprocedural matter communications between an interested person and adecisionmaker regarding which commissioner or administrative lawjudge may be assigned to a matter before the commission. The billwould define an interested person to include a person involved in issuingcredit ratings or advising entities or persons who may invest in theshares or operations of any party to a proceeding as a person with afinancial interest. proceeding. The bill would require that thecommission, by rule, which is already required to adopt and publish adefinition of decisionmakers, that would be required to decisionmakersfor ex parte purposes, include the commissioners and certain otherindividuals in the commission. The bill would require the commissionto establish and maintain a communications log summarizing all oralor written ex parte communications that occur between an interestedperson and any decisionmaker. The bill would require the commissionto post the communications log on its Internet Web site. commissionas “decisionmakers.”

This bill would require that a decisionmaker, in an adjudication orratesetting case, who makes or receives a prohibited participates in anex parte communication, or who receives an ex parte communicationthat was not timely reported, communication to disclose certain

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information regarding the communication in the record of the proceedingbefore the commission takes a vote on the matter. communication. If aprohibited an ex parte communication is not disclosed until after thecommission has issued a decision on the matter to which thecommunication pertained, a party not participating in the communicationwould be authorized to file a petition to rescind or modify the decision.The bill would require the commission to render decisions based uponthe record in a case and would provide that an ex parte communicationnot be part of the record of the proceeding.

This bill would provide that ex parte communications may be arepermitted in quasi-legislative proceedings, but would require that theybe reported within 3 working days in the communications log maintainedby the commission. proceedings and not subject to the above disclosurerequirements, unless the commission makes a formal determinationthat the communications are subject to the disclosure requirements orprohibited.

This bill would require the commission to additionally prohibitcommunications concerning procedural issues matters in adjudicationcases between parties or interested persons with an interest anddecisionmakers, except for the assigned administrative law judge.

Under existing law, the exceptions to the prohibition upon ex partecommunications in ratesetting proceedings authorize a commissionerto permit oral ex parte communications if all interested parties areinvited and given not less than 3 days’ notice. If an ex partecommunication meeting is granted to any party, it is required that allother parties also be granted individual ex parte meetings of asubstantially equal period of time and that all parties be sent a noticeof that authorization at the time the request is granted, at least 3 daysprior to the meeting. The exceptions authorize a commissioner to permitwritten ex parte communications by any party if copies of thecommunication are transmitted to all parties.

This bill would delete the requirement that if an ex partecommunication meeting is granted to any party in a ratesettingproceeding, that all other parties also be granted individual ex partemeetings of a substantially equal period of time and that all parties besent a notice of that authorization at the time the request is granted, atleast 3 days prior to the meeting. The bill would prohibit oralcommunications concerning procedural matters in ratesetting casesbetween parties or persons with an interest and decisionmakers otherthan the assigned administrative law judge, except that a commissioner

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would be authorized to instead subject ex parte communications inratesetting cases to specified disclosure requirements. The bill wouldauthorize a commissioner to permit an oral communication relative toprocedural matters if all interested parties are invited and given not lessthan 3 days’ notice. The bill would prohibit written ex partecommunications concerning procedural matters in ratesetting casesbetween parties or persons with an interest and decisionmakers otherthan the assigned administrative law judge, except that a commissionerwould be authorized to permit a written communication relative toprocedural issues by any party if copies of the communication aretransmitted to all parties on the same day.

This bill would expressly make the prohibitions upon ex partecommunications that relate relating to adjudicatory or ratesettingproceedings applicable to ex parte communications that occur atconferences, as defined. conferences subject to the disclosurerequirements. The bill would also make the disclosure requirementsthat pertain developed by the commission applicable to ex partecommunications that relate relating to quasi-legislative proceedingsapplicable to ex parte communications that occur at conferences.

This bill would authorize the commission to impose civil sanctions,including civil penalties, on any entity or person, other than adecisionmaker or employee of the commission, that violates ex partecommunication requirements. The bill would authorize the AttorneyGeneral to bring an enforcement action in superior court against adecisionmaker or employee of the commission who violates the ex partecommunication requirements.

(3)  The Political Reform Act of 1974 (PRA) provides for theregulation of the lobbying industry, including defining the term“lobbyist” and regulating the conduct of lobbyists.

This bill would state that it is the intent of the Legislature that thecommission, and any entity or person seeking to influence actions takenby the commission, be subject to all applicable ethical standards,including any applicable obligations under the PRA, includingapplicable lobbying obligations.

(3)(4)  Under existing law, a violation of the Public Utilities Act or any

order, decision, rule, direction, demand, or requirement of thecommission is a crime.

Because the provisions of this bill would be a part of the act andbecause a violation of an order or decision of the commission

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implementing its requirements would be a crime, the bill would imposea state-mandated local program by expanding the application of a crime.

(4)(5)  The California Constitution requires the state to reimburse local

agencies and school districts for certain costs mandated by the state.Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this actfor a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: yes.

The people of the State of California do enact as follows:

line 1 SECTION 1. Section 309.6 of the Public Utilities Code is line 2 amended to read: line 3 309.6. (a)  The commission shall adopt procedures on the line 4 disqualification of commissioners and administrative law judges line 5 due to bias or prejudice similar to those of other state agencies and line 6 superior courts. line 7 (b)  (1)  For ratesetting and adjudicatory proceedings, a line 8 commissioner or administrative law judge shall be disqualified if line 9 there is an appearance of for bias or prejudice based on any either

line 10 of the following: line 11 (A)  Actions taken during the proceeding that demonstrate bias line 12 or prejudice. line 13 (B)  Private communications before the commencement of the line 14 proceeding to influence the request for relief sought by any party line 15 to the proceeding. line 16 (C) line 17 (B)  Actions demonstrating any commitment to provide relief line 18 to a party. line 19 (2)  Past work experience by the commissioner or administrative line 20 law judge shall not be a sufficient basis for demonstrating an line 21 appearance of bias or prejudice pursuant to paragraph (1). line 22 (c)  The commission procedures shall not authorize a line 23 commissioner or administrative law judge to rule on a motion line 24 made by a party to a proceeding to disqualify the commissioner line 25 or administrative law judge due to bias or prejudice. line 26 (d)  The commission shall develop the procedures with the line 27 opportunity for public review and comment.

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line 1 SEC. 2. Section 1701.1 of the Public Utilities Code is amended line 2 to read: line 3 1701.1. (a)  The commission shall determine whether each line 4 proceeding is a quasi-legislative, an adjudication, or a ratesetting line 5 proceeding and, consistent with due process, public policy, and line 6 statutory requirements, determine whether the proceeding requires line 7 a hearing. The commission’s decision as to the nature of the line 8 proceeding shall be subject to a request for rehearing within 10 line 9 days of the date of that decision or of any subsequent ruling that

line 10 expands the scope of the proceeding. Only those parties who have line 11 requested a rehearing within that time period shall subsequently line 12 have standing for judicial review and that review shall only be line 13 available at the conclusion of the proceeding. The commission line 14 shall render its decision regarding the rehearing within 30 days. line 15 The commission shall establish rules regarding ex parte line 16 communication on case categorization issues. line 17 (b)  The commission, upon initiating an adjudication proceeding line 18 or ratesetting proceeding, shall assign one or more commissioners line 19 to oversee the case and an administrative law judge where line 20 appropriate. The assigned commissioner shall schedule a prehearing line 21 conference. The assigned commissioner shall prepare and issue line 22 by order or ruling a scoping memo that describes the issues to be line 23 considered and the applicable timetable for resolution. The line 24 administrative law judge shall either preside and conduct, or assist line 25 the assigned commissioner or commissioners in presiding and line 26 conducting, any evidentiary or adjudication hearing that may be line 27 required. line 28 (c)  The commission, upon initiating a quasi-legislative line 29 proceeding, shall assign one or more commissioners to oversee line 30 the case and an administrative law judge, where appropriate, who line 31 may be assisted by a technical advisory staff member in conducting line 32 the proceeding. The assigned commissioner shall prepare and issue line 33 by order or ruling a scoping memo that describes the issues to be line 34 considered and the applicable timetable for resolution. line 35 (d)  (1)  Quasi-legislative cases, for purposes of this article, are line 36 cases that establish policy, including, but not limited to, line 37 rulemakings and investigations which may establish rules affecting line 38 an entire industry.

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line 1 (2)  Adjudication cases, for purposes of this article, are line 2 enforcement cases and complaints except those challenging the line 3 reasonableness of any rates or charges as specified in Section 1702. line 4 (3)  Ratesetting cases, for purposes of this article, are cases in line 5 which rates are established for a specific company, including, but line 6 not limited to, general rate cases, performance-based ratemaking, line 7 and other ratesetting mechanisms. line 8 (4)  “All-party conference,” for purposes of this article, is a line 9 public hearing held on the record before a quorum of

line 10 commissioners at which parties to a proceeding shall have the right line 11 to participate and communicate their views regarding any factual, line 12 legal, or policy issue in the proceeding. line 13 (e)  (1)  (A)  “Ex parte communication,” for purposes of this line 14 article, means any oral or written communication between a line 15 decisionmaker and an interested person concerning any matter line 16 before the commission that the commission has not specified in line 17 its Rules of Practice and Procedure as being a procedural matter line 18 and that does not occur in a public hearing, workshop, or other line 19 public proceeding, or on the official record of the proceeding on line 20 the matter. The commission shall specify in its Rules of Practice line 21 and Procedure, enacted by rulemaking, the types of issues line 22 considered procedural matters under this article. Any line 23 communication between an interested person and a decisionmaker line 24 regarding which commissioner or administrative law judge may line 25 be assigned to a matter before the commission shall not be deemed line 26 to be a procedural matter and shall be an ex parte communication line 27 subject to this article. line 28 (B)  “Interested person,” for purposes of this article, means any line 29 of the following: line 30 (i)  Any applicant, an agent or an employee of the applicant, or line 31 a person receiving consideration for representing the applicant, or line 32 a participant in the proceeding on any matter before the line 33 commission. line 34 (ii)  Any person with a financial interest, as described in Article line 35 1 (commencing with Section 87100) of Chapter 7 of Title 9 of the line 36 Government Code, in a matter before the commission, or an agent line 37 or employee of the person with a financial interest, or a person line 38 receiving consideration for representing the person with a financial line 39 interest. A person involved in issuing credit ratings or advising

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line 1 entities or persons who may invest in the shares or operations of line 2 any party to a proceeding is a person with a financial interest. line 3 (iii)  A representative acting on behalf of any civic, line 4 environmental, neighborhood, business, labor, trade, or similar line 5 organization who intends to influence the decision of a commission line 6 member on a matter before the commission. line 7 (iv)  Other categories of individuals deemed by the commission, line 8 by rule, to be an interested person. line 9 (2)  The commission shall by rule adopt and publish a definition

line 10 of decisionmakers and interested persons for purposes of this line 11 article, along with any requirements for written reporting of ex line 12 parte communications and appropriate sanctions for noncompliance line 13 with any rule proscribing ex parte communications. The definition line 14 of decisionmakers shall include, but is not limited to, each line 15 commissioner; the attorney for the commission; the executive line 16 director of the commission; the personal staff of a commissioner line 17 if the staff is acting in a policy or legal advisory capacity; the chief line 18 administrative law judge of the commission; and the administrative line 19 law judge assigned to the proceeding. line 20 (3)  For adjudication and ratesetting cases, the rules shall provide line 21 that ex parte communications shall be prohibited, as required by line 22 this article. The rules shall provide that if an ex parte line 23 communication occurs that is prohibited by this article, or if an ex line 24 parte communication occurs in a ratesetting case, whether initiated line 25 by a decisionmaker or an interested person, all of the following line 26 shall be required: line 27 (A)  The interested person shall report the communication within line 28 one working day three working days of the communication by line 29 filing a notice with the commission that includes all the following: line 30 (i)  The date, time, and location of the communication, whether line 31 the communication was oral, oral or written, or a combination of line 32 both, and the communication medium utilized. line 33 (ii)  The identity of the decisionmaker, the identity of the person line 34 initiating the communication, and any other persons present. line 35 (iii)  A complete and comprehensive description of the interested line 36 person’s and the decisionmaker’s communication and its content. line 37 (iv)  A copy of any written material or text used during the line 38 communication. line 39 (B)  Any decisionmaker who participated in the communication line 40 shall comply with both of the following:

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line 1 (i)  If the interested person who participated in the line 2 communication has not timely submitted the notice required by line 3 subparagraph (A), the decisionmaker shall refer the matter to a line 4 commission attorney and promptly prepare and file a notice that line 5 includes the information required by subparagraph (A). (A) and a line 6 complete description of the decisionmaker’s communication and line 7 its content. line 8 (ii)  If the interested person has timely submitted the notice line 9 required by subparagraph (A), the decisionmaker shall either

line 10 promptly file a notice affirming the factual representations made line 11 by the interested person in the notice or promptly file a notice line 12 correcting or supplementing that includes a complete description line 13 of the decisionmaker’s communication and its content and, if line 14 appropriate, that corrects or supplements, as applicable, the factual line 15 representations made by the interested person. line 16 (4)  The commission shall not take any vote on a matter where line 17 in which a notice has been filed pursuant to subparagraph (A) or line 18 (B) of paragraph (3) until all parties to the proceeding have been line 19 provided a reasonable opportunity to respond to the line 20 communication. line 21 (5)  If a prohibited an ex parte communication is not disclosed line 22 as required by this subdivision until after the commission has line 23 issued a decision on the matter to which the prohibited line 24 communication pertained, a party not participating in the line 25 communication may file a petition to rescind or modify the line 26 decision. The party may seek a finding that the ex parte line 27 communication was prohibited and significantly influenced the line 28 decision’s process or outcome as part of any petition to rescind or line 29 modify the decision. The commission shall process the petition in line 30 accordance with the commission’s procedures for petitions for line 31 modification and shall issue a decision on the petition no later than line 32 180 days after the filing of the petition. line 33 (6)  (A)  Ex parte communications that occur at conferences that line 34 are related to an adjudication or ratesetting proceeding shall be line 35 prohibited consistent with the ex parte communications and subject line 36 to the disclosure requirements of this article. line 37 (B)  Ex parte communications that occur at conferences and that line 38 are related to a quasi-legislative proceeding shall be governed by line 39 the ex parte communication disclosure requirements developed line 40 by the commission.

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line 1 (C)  For purposes of this section, “ex parte communications that line 2 occur at conferences” includes, but is not limited to, line 3 communications in a private setting or during meals, entertainment line 4 events, and tours, and informal discussions among conference line 5 attendees. line 6 (7)  The commission shall render its decisions based on the line 7 evidence in the record. Ex parte communications shall not be a line 8 part of the record of the proceedings. line 9 (f)  The commission may meet in a closed session to discuss

line 10 administrative matters so long as no collective consensus is reached line 11 or vote taken on any matter requiring a vote of the commissioners. line 12 The commission shall, by rule, adopt and publish a definition of line 13 “administrative matters” for purposes of this section. line 14 (g)  The commission shall permit written comments received line 15 from the public to be included in the record of its proceedings. line 16 The commission shall provide parties to the proceeding a line 17 reasonable opportunity to respond to any public comments included line 18 in the record of proceedings. line 19 (h)  It is the intent of the Legislature that the commission, and line 20 any entity or person seeking to influence actions taken by the line 21 commission, shall be subject to all applicable ethical standards, line 22 including any applicable obligations under the Political Reform line 23 Act of 1974 (Title 9 (commencing with Section 81000) of the line 24 Government Code), including, but not limited to, any applicable line 25 lobbying obligations. line 26 SEC. 3. Section 1701.2 of the Public Utilities Code is amended line 27 to read: line 28 1701.2. (a)  If the commission pursuant to Section 1701.1 has line 29 determined that an adjudication case requires a hearing, the line 30 assigned commissioner or the assigned administrative law judge line 31 shall hear the case in the manner described in the scoping memo. line 32 The scoping memo shall designate whether the assigned line 33 commissioner or the assigned administrative law judge shall preside line 34 in the case. line 35 (b)  The commission shall provide by rule for peremptory line 36 challenges and challenges for cause of the administrative law judge. line 37 Challenges for cause shall include, but not be limited to, financial line 38 interests and prejudice. The rule shall provide that all parties are line 39 entitled to one peremptory challenge of the assignment of the line 40 administrative law judge in all cases. All parties are entitled to

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line 1 unlimited peremptory challenges in any case in which the line 2 administrative law judge has within the previous 12 months served line 3 in any capacity in an advocacy position at the commission, been line 4 employed by a regulated public utility, or has represented a party line 5 or has been an interested person in the case. line 6 (c)  The assigned commissioner or the administrative law judge line 7 shall prepare and file a decision setting forth recommendations, line 8 findings, and conclusions. The decision shall be filed with the line 9 commission and served upon all parties to the action or proceeding

line 10 without undue delay, not later than 60 days after the matter has line 11 been submitted for decision. The decision of the assigned line 12 commissioner or the administrative law judge shall become the line 13 decision of the commission if no further action is taken within 30 line 14 days. Any party may appeal the decision to the commission, line 15 provided that the appeal is made within 30 days of the issuance of line 16 the decision. The commission may itself initiate a review of the line 17 proposed decision on any grounds. line 18 (d)  The commission may hold an all-party conference before a line 19 quorum of commissioners at which all parties have an opportunity line 20 to be heard. The commission shall adopt rules for implementation line 21 of all-party conferences that ensure the broadest participation by line 22 parties to the proceeding that the commission can reasonably line 23 accommodate consistent with the commissioners’ other duties and line 24 responsibilities. line 25 (e)  The commission’s decision shall be supported by findings line 26 of fact on all issues material to the decision, and the findings of line 27 fact shall be based on the record developed by the assigned line 28 commissioner or the administrative law judge. A decision different line 29 from that of the assigned commissioner or the administrative law line 30 judge shall be accompanied by a written explanation of each of line 31 the changes made to the decision. line 32 (f)  Notwithstanding Section 307, an officer, employee, or agent line 33 of the commission that is personally involved in the prosecution line 34 or in the supervision of the prosecution of an adjudication case line 35 before the commission shall not participate in the decision of the line 36 case, or in the decision of any factually related adjudicatory line 37 proceeding, including participation in or advising the commission line 38 as to findings of fact, conclusions of law, or orders. An officer, line 39 employee, or agent of the commission that is personally involved line 40 in the prosecution or in the supervision of the prosecution of an

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line 1 adjudication case may participate in reaching a settlement of the line 2 case, but shall not participate in the decision of the commission to line 3 accept or reject the settlement, except as a witness or counsel in line 4 an open hearing or a hearing closed pursuant to subdivision (h). line 5 The Legislature finds that the commission performs both line 6 prosecutorial and adjudicatory functions in an adjudication case line 7 and declares its intent that an officer, employee, or agent of the line 8 commission, including its attorneys, may perform only one of line 9 those functions in any adjudication case or factually related

line 10 adjudicatory proceeding. line 11 (g)  (1)  Ex parte communications shall be prohibited in line 12 adjudication cases. line 13 (2)  Any oral or written communications concerning procedural line 14 matters in adjudication cases between interested persons and line 15 decisionmakers, except the assigned administrative law judge, line 16 shall be prohibited. line 17 (h)  Notwithstanding any other law, the commission may meet line 18 in a closed hearing to consider the decision that is being appealed. line 19 The vote on the appeal shall be in a public meeting and shall be line 20 accompanied with an explanation of the appeal decision. line 21 (i)  Adjudication cases shall be resolved within 12 months of line 22 initiation unless the commission makes findings why that deadline line 23 cannot be met and issues an order extending that deadline. In the line 24 event that a rehearing of an adjudication case is granted, the parties line 25 shall have an opportunity for final oral argument. line 26 (j)  (1)  The commission may determine that the respondent line 27 lacks, or may lack, the ability to pay potential penalties or fines line 28 or to pay restitution that may be ordered by the commission. line 29 (2)  If the commission determines that a respondent lacks, or line 30 may lack, the ability to pay, the commission may order the line 31 respondent to demonstrate, to the satisfaction of the commission, line 32 sufficient ability to pay potential penalties, fines, or restitution that line 33 may be ordered by the commission. The respondent shall line 34 demonstrate the ability to pay, or make other financial line 35 arrangements satisfactory to the commission, within seven days line 36 of the commission commencing an adjudication case. The line 37 commission may delegate to the attorney to the commission the line 38 determination of whether a sufficient showing has been made by line 39 the respondent of an ability to pay.

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line 1 (3)  Within seven days of the commission’s determination of the line 2 respondent’s ability to pay potential penalties, fines, or restitution, line 3 the respondent shall be entitled to an impartial review by an line 4 administrative law judge of the sufficiency of the showing made line 5 by the respondent of the respondent’s ability to pay. The review line 6 by an administrative law judge of the ability of the respondent to line 7 pay shall become part of the record of the adjudication and is line 8 subject to the commission’s consideration in its order resolving line 9 the adjudication case. The administrative law judge may enter

line 10 temporary orders modifying any financial requirement made of line 11 the respondent pending the review by the administrative law judge. line 12 (4)  A respondent that is a public utility regulated under a rate line 13 of return or rate of margin regulatory structure or that has gross line 14 annual revenues of more than one hundred million dollars line 15 ($100,000,000) generated within California is presumed to be able line 16 to pay potential penalties or fines or to pay restitution that may be line 17 ordered by the commission, and, therefore, paragraphs (1) to (3), line 18 inclusive, do not apply to that respondent. line 19 SEC. 4. Section 1701.3 of the Public Utilities Code is amended line 20 to read: line 21 1701.3. (a)  If the commission pursuant to Section 1701.1 has line 22 determined that a ratesetting case requires a hearing, the procedures line 23 prescribed by subdivisions (b), (d), (f), and (i) shall be applicable. line 24 (b)  The assigned commissioner shall determine prior to the first line 25 hearing whether the commissioner or the assigned administrative line 26 law judge shall be designated as the principal hearing officer. The line 27 principal hearing officer shall be present for more than one-half line 28 of the hearing days. The decision of the principal hearing officer line 29 shall be the proposed decision. line 30 (c)  An alternate decision may be issued by the assigned line 31 commissioner or the assigned administrative law judge who is not line 32 the principal hearing officer. Any alternate decision may be filed line 33 with the commission and served upon all parties to the proceeding line 34 any time prior to issuance of a final decision by the commission, line 35 consistent with the requirements of Section 311. line 36 (d)  The commission shall establish a procedure for any party line 37 to request the presence of a commissioner at a hearing. The line 38 assigned commissioner shall be present at any closing arguments line 39 in the case.

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line 1 (e)  The principal hearing officer shall present the proposed line 2 decision to the full commission in a public meeting. The alternate line 3 decision, if any, shall also be presented to the full commission at line 4 that public meeting. line 5 (f)  The presentation to the full commission shall contain a record line 6 of the number of days of the hearing, the number of days that each line 7 commissioner was present, and whether the decision was completed line 8 on time. line 9 (g)  The commission shall provide by rule for peremptory

line 10 challenges and challenges for cause of the administrative law judge. line 11 Challenges for cause shall include, but not be limited to, financial line 12 interests and prejudice. All parties shall be entitled to unlimited line 13 peremptory challenges in any case in which the administrative law line 14 judge has within the previous 12 months served in any capacity line 15 in an advocacy position at the commission, been employed by a line 16 regulated public utility, or has represented a party or has been an line 17 interested person in the case. line 18 (h)  (1)  Ex parte communications are prohibited in ratesetting line 19 cases. cases are subject to the disclosure requirements of this line 20 article. The commission may make a formal determination line 21 prohibiting ex parte communications in a ratesetting case within line 22 90 days of the commencement of the proceeding. line 23 (A)  Oral communications may be permitted by a decisionmaker line 24 if all parties are invited to the meeting and given not less than three line 25 working days’ notice. line 26 (B)  Written ex parte communications by any interested person line 27 may be permitted if copies of the communication are transmitted line 28 to all parties on the same day as the original communication. line 29 Written ex parte communications shall not be part of the record line 30 of the proceeding. line 31 (C)  The commission may establish a period during which no line 32 oral or written all-party communications may be permitted and line 33 the commission may meet in closed session during that period, line 34 which shall not in any circumstance exceed 14 days. If the line 35 commission holds the decision, it may permit all-party line 36 communications during the first half of the interval between the line 37 hold date and the date that the decision is calendared for final line 38 decision. The commission may meet in closed session for the line 39 second half of that interval.

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line 1 (2)  Oral communications concerning a procedural matter in line 2 ratesetting cases between interested persons and decisionmakers, line 3 except the assigned administrative law judge, are prohibited, except line 4 that an oral communication may be permitted at any time by any line 5 decisionmaker if all parties are invited and given not less than line 6 three working days’ notice. line 7 (3)  Written communications concerning a procedural matter in line 8 ratesetting cases between interested persons and decisionmakers, line 9 except the assigned administrative law judge, are prohibited, except

line 10 that a decisionmaker may permit a written communication by any line 11 party if copies of the communication are transmitted to all parties line 12 on the same day. line 13 (i)  Any party has the right to present a final oral argument of line 14 its case before the commission. Those requests shall be scheduled line 15 in a timely manner. A quorum of the commission shall be present line 16 for the final oral arguments. line 17 (j)  After the issuance of a proposed decision in a ratesetting line 18 case, the commission may hold an all-party conference before a line 19 quorum of commissioners at which all parties have an opportunity line 20 to be heard. The commission shall adopt rules for implementation line 21 of all-party conferences that ensure the broadest participation by line 22 parties to the proceeding that the commission can reasonably line 23 accommodate consistent with the commissioners’ other duties and line 24 responsibilities. line 25 (k)  The commission may, in issuing its decision, adopt, modify, line 26 or set aside the proposed decision or any part of the decision based line 27 on evidence in the record. The final decision of the commission line 28 shall be issued not later than 60 days after the issuance of the line 29 proposed decision. Under extraordinary circumstances the line 30 commission may extend this date for a reasonable period. The line 31 60-day period shall be extended for 30 days if any alternate line 32 decision is proposed pursuant to Section 311. line 33 SEC. 5. Section 1701.4 of the Public Utilities Code is amended line 34 to read: line 35 1701.4. (a)  If the commission pursuant to Section 1701.1 has line 36 determined that a quasi-legislative case requires a hearing, the line 37 procedures prescribed by subdivisions (b) and (d) to (f), inclusive, line 38 shall be applicable. line 39 (b)  The assigned administrative law judge and any assigned line 40 technical advisory staff shall act as an assistant to the assigned

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line 1 commissioner in quasi-legislative cases. The assigned line 2 commissioner shall prepare the proposed rule or order with the line 3 assistance of the administrative law judge and any assigned line 4 technical advisory staff. The assigned commissioner shall present line 5 the proposed rule or order to the full commission in a public line 6 meeting. The report shall include the number of days of hearing line 7 and the number of days that the commissioner was present. line 8 (c)  Ex parte communications may be permitted. Any ex parte line 9 communication shall be reported in compliance with Section

line 10 1701.6. No reporting shall be required for written ex parte line 11 communications that are transmitted to all parties on the same day line 12 as the original communication. line 13 (c)  Ex parte communications in quasi-legislative proceedings line 14 are permitted and not subject to the disclosure requirements of line 15 this article, except when the commission, within 90 days of the line 16 commencement of a quasi-legislative proceeding, makes a formal line 17 determination of either of the following. line 18 (1)  That ex parte communications are subject to the disclosure line 19 requirements of this article. line 20 (2)  That ex parte communications are prohibited and subject line 21 to the disclosure requirements of this article. line 22 (d)  Any party has the right to present a final oral argument of line 23 its case before the commission. Those requests shall be scheduled line 24 in a timely manner. A quorum of the commission shall be present line 25 for the final oral arguments. line 26 (e)  After the issuance of a proposed decision in a line 27 quasi-legislative case, the commission may hold an all-party line 28 conference before a quorum of commissioners at which all parties line 29 have an opportunity to be heard. The commission shall adopt rules line 30 for implementation of all-party conferences that ensure the broadest line 31 participation by parties to the proceeding that the commission can line 32 reasonably accommodate consistent with the commissioners’ other line 33 duties and responsibilities. line 34 (f)  The commission may, in issuing its rule or order, adopt, line 35 modify, or set aside the proposed decision or any part of the rule line 36 or order. The final rule or order of the commission shall be issued line 37 not later than 60 days after the issuance of the proposed rule or line 38 order. Under extraordinary circumstances the commission may line 39 extend this date for a reasonable period. The 60-day period shall

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line 1 be extended for 30 days if any alternate rule or order is proposed line 2 pursuant to Section 311. line 3 SEC. 6. Section 1701.5 of the Public Utilities Code is amended line 4 to read: line 5 1701.5. (a)  Except as specified in subdivision (b), in a line 6 ratesetting or quasi-legislative case, the commission shall resolve line 7 the issues raised in the scoping memo within 18 months of the date line 8 the proceeding is initiated, unless the commission makes a written line 9 determination that the deadline cannot be met, including findings

line 10 as to the reason, and issues an order extending the deadline. line 11 (b)  Notwithstanding subdivision (a), the commission may line 12 specify in a scoping memo a resolution date later than 18 months line 13 from the date the proceeding is initiated, if that scoping memo line 14 includes specific reasons for the necessity of a later date and the line 15 commissioner assigned to the case approves the date. line 16 SEC. 7. Section 1701.6 is added to the Public Utilities Code, line 17 to read: line 18 1701.6. (a)  The commission shall establish and maintain a line 19 communications log summarizing all oral and written ex parte line 20 communications, as defined in Section 1701.1. line 21 (b)  The communications log shall include a summary of all oral line 22 and written communications that meet the definition of an ex parte line 23 communication that occur between an interested person and any line 24 decisionmaker. line 25 (c)  Each record of a communication in the communication log line 26 shall include the date of each communication, the persons involved line 27 in the communication, and, to the extent known, any proceedings line 28 that were the subject of each communication. Ex parte line 29 communications in the summary log shall be reported no later than line 30 three working days after the communication. line 31 (d)  The communication log shall be made available to the public line 32 on the commission’s Internet Web site not later than July 1, 2017. line 33 SEC. 8. line 34 SEC. 7. Section 1701.71701.6 is added to the Public Utilities line 35 Code, to read: line 36 1701.7. line 37 1701.6. (a)  In addition to any penalty, fine, or other punishment line 38 applicable pursuant to Article 11 (commencing with Section 2100), line 39 the commission may assess civil sanctions upon any entity or line 40 person, other than a decisionmaker or employee of the commission,

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line 1 who violates, fails to comply with, or procures, aids, or abets any line 2 violation of, the ex parte communication requirements of this line 3 article or those adopted by the commission pursuant to this article. line 4 The civil sanctions may include civil penalties, adverse line 5 consequences in commission proceedings, or other appropriate line 6 commission orders directed at the entity, person, or both the entity line 7 and person, committing the violation. line 8 (b)  (1)  Except as provided in paragraph (2), a civil penalty line 9 assessed shall not exceed fifty thousand dollars ($50,000) per

line 10 violation. Each day of a continuing violation is a separate violation. line 11 If the violation consists of engaging in a communication that is line 12 prohibited by the ex parte communication requirements, each day line 13 that the violation is not disclosed to the commission and to parties line 14 of record in the formal proceeding in which the communication line 15 occurred shall constitute a separate violation. line 16 (2)  If the entity or person may obtain, by violating the ex parte line 17 communication requirements, financial benefits that exceed the line 18 maximum amount of civil penalty allowable pursuant to paragraph line 19 (1), the commission may impose a civil penalty up to the amount line 20 of those financial benefits. line 21 (c)  Civil penalties assessed pursuant to subdivision (b) upon line 22 entities whose rates are determined by the commission shall be in line 23 the form of credits to the customers of that entity. Civil penalties line 24 collected from other entities shall be deposited in the General Fund. line 25 (d)  In determining the appropriate civil sanctions, the line 26 commission shall consider the following factors: line 27 (1)  The severity of the violation. line 28 (2)  The conduct of the entity or person, including the level of line 29 experience of the entity or person in participating in commission line 30 proceedings and whether the entity or person knowingly violated line 31 the ex parte communication requirements. line 32 (3)  The financial resources of the entity or person. line 33 (4)  The totality of the circumstances in furtherance of the public line 34 interest. line 35 SEC. 9. line 36 SEC. 8. Section 1701.81701.7 is added to the Public Utilities line 37 Code, to read: line 38 1701.8. line 39 1701.7. (a)  The Attorney General may bring an enforcement line 40 action in superior court against a decisionmaker or employee of

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line 1 the commission who violates, fails to comply with, or procures, line 2 aids, or abets any violation of, the ex parte communication line 3 requirements in this article or those adopted by the commission line 4 pursuant to this article. line 5 (b)  Notwithstanding Section 1759, in an enforcement action line 6 brought pursuant to this section, the court may grant appropriate line 7 relief, including disqualification of the decisionmaker from one line 8 or more proceedings and civil penalties as provided in Section line 9 2111.

line 10 (c)  In determining the appropriate relief, the court may consider line 11 the following factors: line 12 (1)  The severity of the violation. line 13 (2)  The conduct of the decisionmaker or employee, including line 14 whether the decisionmaker or employee knowingly violated the line 15 ex parte communication requirements. line 16 (3)  The financial resources of the decisionmaker or employee. line 17 (4)  The totality of the circumstances in furtherance of the public line 18 interest. line 19 (d)  The Attorney General may compromise the enforcement line 20 action subject to approval by the court. line 21 (e)  Civil penalties collected pursuant to this section shall be line 22 deposited into the Litigation Deposits Fund established pursuant line 23 to Article 9 (commencing with Section 16425) of Chapter 2 of line 24 Part 2 of Division 4 of Title 2 of the Government Code. line 25 SEC. 10. line 26 SEC. 9. No reimbursement is required by this act pursuant to line 27 Section 6 of Article XIIIB of the California Constitution because line 28 the only costs that may be incurred by a local agency or school line 29 district will be incurred because this act creates a new crime or line 30 infraction, eliminates a crime or infraction, or changes the penalty line 31 for a crime or infraction, within the meaning of Section 17556 of line 32 the Government Code, or changes the definition of a crime within line 33 the meaning of Section 6 of Article XIII B of the California line 34 Constitution.

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